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FTA phase 2 delayed by a month; will

take effect from Jan 1

Inspiring Change
tariff concessions enjoyed by the ASEAN countries.
The second phase of the Free Trade Agreement
(FTA) between China and Pakistan will take effect
Under the Phase-II of China-Pakistan FTA, both
from January 1, 2020 instead of December 1, 2019
as it has been delayed for a month reportedly due to
delays in government approvals and protocols on the countries will liberalise 75 percent of tariff lines for
each other. The agreement covers 313 tariff lines of
Conference 2020
Chinese side.
US $8.7 billion of Pakistan's overall exports and US
$64 billion of China’s global imports. A total of 1,037
A joint statement is expected to be released after the
products will now have duty-free access to the
Chinese market; textile and garments sector is at the
Chinese approvals are acquired.
to be held in
In December, Abdul Razak Dawood, Adviser to the forefront of this deal and will help enhance the
sector’s exports to China as it offers the same duty
Prime Minister for Commerce, Textile, Industry & free access enjoyed by ASEAN countries. A total of Chinese investors eye deeper ties
Production and Investment, announced that the 1,760 or 25 percent of tariff lines are categorized as
second phase would come into effect from Decem- Protected Tariff Lines under the agreement and
September
ber 1 and it was becoming operational earlier than covers 37 percent of Pakistan's imports from China. with Pakistan in textile sector
usual. He said that it usually took a year to make
such agreements operational between countries but
because of the special relations enjoyed by both the During the first phase, local manufactures com- Chinese investors are looking to deepen their ties meeting in April 2019 between Shanghai Challenge
countries, this agreement would become operational plained about the unbalance in the deal, especially with the Pakistani textile industry. The Pakistani and Abdur Razzak Dawood, the prime minister’s
from December 1. the textile sector, which raised concerns about the industry is looking forward to this initiative as advisor on commerce and industry. The park is
favours it granted the Chinese textile industry. Tariffs Chinese companies look to outsource production to hoped to employ around 5,000 people.
were imposed on Pakistani garment exports during
The third edition of the annual Inspiring Change
The textile sector of Pakistan expected to get a boost The textiles industry, which is the largest centres that offer skilled workforce with lower labour
the first phase, whereas the country’s competitors
Conference 2020, scheduled for 10th and 11th of
in exports to China as the phase II of the FTA manufacturing industry in the country and also the costs and government incentives like reduced taxes Apart from the park, Shanghai Challenge has also
from the ASEAN had duty free access.
March has been moved to September 18-19, 2020
between China and Pakistan as it offered the same biggest exporter of Pakistan, also has the lion’s and duties. acquired 25 percent shares in Masood Textile Mills,
due to security and logistical reasons, as the share of problems and challenges. The Inspiring also based in Faisalabad, indicating their deeper
Pakistan Super League (PSL) too is being held in Change Conference brings policy makers, decision “The interest of Chinese investors in the textile/gar- interest in moving operations to Pakistan. The
Lahore on the same dates. makers, garment makers, raw input material ments segment has increased manifold in the company also owns another plant in Faisalabad
growers, solutions providers, and international
Ethiopia – the next textile
“This year’s event will be just as well organised and stakeholders in one place to discuss issues that Punjab (the province with a major clothing and textile which produces garments to major brands like
Adidas and Puma for sale in the US and Europe.
manufacturing hub),” says Sharqui Tipu, the
even bigger than the previous year’s conference,” affect us all – big and small stakeholders alike. additional director for exhibitions and events, Punjab
said Yousaf Fareed, CEO of TEXtalks International, Board of Investment & Trade. The Shanghai Yuanyi Industry Company also signed
manufacturing hub?
organisers of the event. For centuries, the region has been known for its agreements with the Pak China Investment Company
textile industry and has remained one of the biggest
After the massive success of the Inspiring Change avenues for revenue generation. The Pakistani textile “One of the potential projects with around US$500m in April 2019, which promise them investment
opportunities in Punjab’s textile and clothing sector.
is the setting up of a comprehensive textile park near
Conference last year, TEXtalks is bringing back the industry, with its 11.3 million spindles, 3 million Lahore, where initial work on the project is already
Despite challenges like energy supply, customs
China Chamber of Commerce for Import and Export
platform that discussed innovation, emerging global rotors, 350,000 power looms, 18,000 knitting completed and construction is in the final stage," Tipu said Chinese companies are facing a slowdown
procedures, lack of backward linkages and insuffi-
of Textile and Apparel (CCCT), according to an ITC
issues and solutions for the textile industry, including machines and processing capacity of 5.2 billion Tipu said. in the economy and are looking for alternate produc-
cient skills, Ethiopia has the potential to become a
press release.
sustainability issues, cutting edge research and sqm, and 700,000 industrial and local stitching units tion locations in Asia and Africa due to increased
global textile manufacturing hub with its wide and
development, and opportunities for the discussion of with a capacity of 500,000 tons is a complete textiles A key investor in the Lahore Apparel Park is Shang- labour and wage costs in mainland China. He said
The event attracted more than 100 international
young labour pool, growing market potential,
latest global trends, new ideas and technologies, value chain which is rare globally. To address the hai Challenge Textile Co LTD, through its subsidiary, Pakistani companies will have to step up their game
buyers, potential Chinese investors, representatives
advantageous trade agreements and strategic
evaluating and fi¬nding solutions for industry issues needs, ambitions and future ventures of Pakistan’s the Faisalabad-based Challenge Apparels. The as China is also pursuing manufacturing from other
of Chinese and foreign companies in Ethiopia and of
position, participants agreed at a recent dialogue in
and challenges, sustainable textile development, largest industrial sector, TEXtalks invites industry project is expected to start production for export by low labour cost countries like Bangladesh, Laos,
Addis Ababa.
Ethiopian institutions. It was followed by field visits to
corporate networking with national and global experts to gather and explore the world of textiles next year (2021). Cambodia, Vietnam.
factories in several industrial parks around Addis
textile experts. with us!
The dialogue on Ethiopia’s potential to become the
Ababa.
next textile and apparel (T&A) supply base for the The Punjab government hopes that the apparel park Pakistan recently hosted the 35th International
world was organised in November by the Internation- The Ethiopian government has also prioritised the would earn revenues worth USD 300 million to USD Apparel Federation (IAF) Fashion Convention, where
al Trade Centre (ITC) under the Partnership for development of this sector, setting up the Ethiopian 500 million a year. investors and executives from across the world
Investment and Growth in Africa (PIGA) project. The Textile Industry Development Institute (ETIDI) to witnessed the country’s increasingly attractive
discussion was organised in collaboration with the strengthen the overall value chain, and created a The Pakistani government predicts a Chinese location for foreign direct investment – especially in
Ethiopian Investment Commission (EIC) and the conducive investment climate for the sector. investment of up to a billion dollars following a the textile and clothing sector.
February/March 2020January/February 2020 February/March 2020